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Day: September 19, 2013

The Untold Risks of the Supreme Court’s Same-Sex Marriage Decisions

September 19, 2013

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Less than two months ago, the Supreme Court’s same-sex marriage rulings triggered ecstatic celebrations among gay couples and advocates of equality. Although the Justices did not strike down laws limiting marriage to straight couples, that decision seemed an inevitable next step. But in reality, newly filed challenges to state marriage laws have set the table for what may be a catastrophic setback at the Supreme Court.

The Justices’ rulings do point towards an eventual ruling that same-sex couples have the equal right to marry. The Court is moving along with the tides of history.

The Court held that Congress could not refuse to recognize same-sex marriages endorsed by the states. And it also turned back an effort to reinstate California’s Proposition 8, which defined marriage as exclusively between a man and a woman. Those decisions build on two others dating back more than fifteen years, striking down laws that discriminate against gays and lesbians.

But those positive rulings make it easy to miss signals that the Court is not yet ready to announce a constitutional right to same-sex marriage before the states fully consider the issue. Presented with the perfect chance to issue a sweeping ruling in the California case, the Justices ducked and instead dismissed it on procedural grounds.

At oral argument, center-vote Justice Anthony Kennedy showed no enthusiasm for a broad ruling that would strike down the many state laws and constitutions that still embrace the traditional limits on marriage. Three more liberal Justices voted to avoid issuing any decision on the issue.

The separate ruling on the federal Defense of Marriage Act case was more encouraging. But the Court declined to hold that the Constitution requires the federal government to recognize all same-sex marriages. Instead, it ruled that if a state itself opts to recognize such a union, federal law must respect that choice.

Knowing that the lower courts would scrutinize the ruling, the Court carefully chose its language. The opinion reasons that laws recognizing same-sex marriage “eliminate inequality” and further the interests of the children of same-sex couples. But it seems to place principal responsibility to make that choice “within the realm and authority of the separate States,” rather than the federal courts – at least for now.

In dissent, Justice Scalia insisted that the Court’s ruling would inevitably lead it to announce a right to same-sex marriage. Chief Justice Roberts disagreed. In truth, both are probably right: the Court does not yet seem ready to take that significant step, but it could do so at some point in the next five to ten years.

In even that brief time, the number of states recognizing same-sex marriage will probably grow from thirteen to near twenty. The public’s acceptance of same-sex unions will continue to expand quickly. And a number of lower courts will begin to recognize a right to same-sex marriage.

It will become even more apparent to the Justices that these marriages are accepted and a valuable part of our diverse national fabric. Against that backdrop, the Court would be positioned to issue a decision that embraces a change in our social structure that is already well underway, rather than seeming to impose it.

But test cases now racing towards the Supreme Court will arrive there in months, not years. Following the NAACP’s model, gay-rights lawyers previously tried to bring individual cases that built over several years towards a sweeping ruling in favor of equality. The next incremental step now would be a ruling that a valid same-sex marriage must be recognized not only by the federal government, but also by other states.

But the moments at which justice seems within reach can present social movements with their greatest tests. The Court’s recent rulings have lit a fuse that may have a bomb at the other end. Individual couples who have misread the signals from the Supreme Court instead launched much broader constitutional challenges to the traditional definition of marriage.

Roughly ten cases are already pending. Soon, several will be decided by the courts of appeals.

Technically, the Justices could stay out of the fray; nothing requires them to hear such a case. But realistically, the question of whether the traditional definition of marriage is unconstitutional is so important that the Court must decide it.

At most, it might duck the first or second case. So we are no more than two or three years away from a ruling on the basic question of the definition of marriage.

If a majority of the Court is unwilling to anticipate the tides of history, it will issue a negative ruling that leaves the issue to the states and reject the claims of same-sex marriage advocates. That decision would almost surely be overturned after social attitudes have evolved further. But the Court does not reverse itself quickly. Its 1986 ruling upholding state sodomy laws was not overruled for almost twenty years.

Until then, progress towards changing state marriage laws could stall. More broadly, such a significant loss could undermine the clarity of the moral message sent by the Court’s rulings that discrimination against gays and lesbians is irrational and wrong. The Justices’ response to that looming dilemma will be an extraordinary test of their judgment.

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

certiorari to the united states court of appeals for the federal circuit

No. 08–964. Argued November 9, 2009—Decided June 28, 2010

Petitioners’ patent application seeks protection for a claimed invention that explains how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. The key claims are claim 1, which describes a series of steps instructing how to hedge risk, and claim 4, which places the claim 1 concept into a simple mathematical formula. The remaining claims explain how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand. The patent examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The Federal Circuit, in turn, affirmed. The en banc court rejected its prior test for determining whether a claimed invention was a patentable “process” under Patent Act, 35 U. S. C. §101— i.e., whether the invention produced a “useful, concrete, and tangible result,” see, e.g., State Street Bank & Trust Co v. Signature Financial Group, Inc. , 149 F. 3d 1368, 1373—holding instead that a claimed process is patent eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. Concluding that this “machine-or-transformation test” is the sole test for determining patent eligibility of a “process” under §101, the court applied the test and held that the application was not patent eligible.

Held: The judgment is affirmed.

545 F. 3d 943, affirmed.

Justice Kennedy delivered the opinion of the Court, except as to Parts II–B–2 and II–C–2, concluding that petitioners’ claimed invention is not patent eligible. Pp. 4–8, 10–11, 12–16.

(a) Section 101 specifies four independent categories of inventions or discoveries that are patent eligible: “process[es],” “machin[es],” “manufactur[es],” and “composition[s] of matter.” “In choosing such expansive terms, … Congress plainly contemplated that the patent laws would be given wide scope,”Diamond v. Chakrabarty , 447 U. S. 303 , in order to ensure that “ ‘ingenuity should receive a liberal encouragement,’ ” id., at 308–309. This Court’s precedents provide three specific exceptions to §101’s broad principles: “laws of nature, physical phenomena, and abstract ideas.” Id., at 309. While not required by the statutory text, these exceptions are consistent with the notion that a patentable process must be “new and useful.” And, in any case, the exceptions have defined the statute’s reach as a matter of statutory stare decisis going back 150 years. See Le Roy v. Tatham, 14 How. 156, 174. The §101 eligibility inquiry is only a threshold test. Even if a claimed invention qualifies in one of the four categories, it must also satisfy “the conditions and requirements of this title,” §101(a), including novelty, see §102, nonobviousness, see §103, and a full and particular description, see §112. The invention at issue is claimed to be a “process,” which §100(b) defines as a “process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” Pp. 4–5.

(b) The machine-or-transformation test is not the sole test for patent eligibility under §101. The Court’s precedents establish that although that test may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible “process” under §101. In holding to the contrary, the Federal Circuit violated two principles of statutory interpretation: Courts “ ‘should not read into the patent laws limitations and conditions which the legislature has not expressed,’ ” Diamond v. Diehr , 450 U. S. 175 , and, “[u]nless otherwise defined, ‘words will be interpreted as taking their ordinary, contemporary, common meaning,’ ” ibid. The Court is unaware of any ordinary, contemporary, common meaning of “process” that would require it to be tied to a machine or the transformation of an article. Respondent Patent Director urges the Court to read §101’s other three patentable categories as confining “process” to a machine or transformation. However, the doctrine of noscitur a sociis is inapplicable here, for §100(b) already explicitly defines “process,” see Burgess v. United States ,553 U. S. 124 , and nothing about the section’s inclusion of those other categories suggests that a “process” must be tied to one of them. Finally, the Federal Circuit incorrectly concluded that this Court has endorsed the machine-or-transformation test as the exclusive test. Recent authorities show that the test was never intended to be exhaustive or exclusive. See, e.g., Parker v. Flook ,437 U. S. 584 , n. 9. Pp. 5–8.

(c) Section 101 similarly precludes a reading of the term “process” that would categorically exclude business methods. The term “method” within §100(b)’s “process” definition, at least as a textual matter and before other consulting other Patent Act limitations and this Court’s precedents, may include at least some methods of doing business. The Court is unaware of any argument that the “ordinary, contemporary, common meaning,” Diehr ,supra , at 182, of “method” excludes business methods. Nor is it clear what a business method exception would sweep in and whether it would exclude technologies for conducting a business more efficiently. The categorical exclusion argument is further undermined by the fact that federal law explicitly contemplates the existence of at least some business method patents: Under §273(b)(1), if a patent-holder claims infringement based on “a method in [a] patent,” the alleged infringer can assert a defense of prior use. By allowing this defense, the statute itself acknowledges that there may be business method patents. Section 273 thus clarifies the understanding that a business method is simply one kind of “method” that is, at least in some circumstances, eligible for patenting under §101. A contrary conclusion would violate the canon against interpreting any statutory provision in a manner that would render another provision superfluous. See Corley v. United States , 556 U. S. ___, ___. Finally, while §273 appears to leave open the possibility of some business method patents, it does not suggest broad patentability of such claimed inventions. Pp. 10–11.

(d) Even though petitioners’ application is not categorically outside of §101 under the two atextual approaches the Court rejects today, that does not mean it is a “process” under §101. Petitioners seek to patent both the concept of hedging risk and the application of that concept to energy markets. Under Benson ,Flook , and Diehr , however, these are not patentable processes but attempts to patent abstract ideas. Claims 1 and 4 explain the basic concept of hedging and reduce that concept to a mathematical formula. This is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flook . Petitioners’ remaining claims, broad examples of how hedging can be used in commodities and energy markets, attempt to patent the use of the abstract hedging idea, then instruct the use of well-known random analysis techniques to help establish some of the inputs into the equation. They add even less to the underlying abstract principle than the invention held patent ineligible in Flook. Pp. 12–15.

(e) Because petitioners’ patent application can be rejected under the Court’s precedents on the unpatentability of abstract ideas, the Court need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson ,Flook , and Diehr . Nothing in today’s opinion should be read as endorsing the Federal Circuit’s past interpretations of §101. See,e.g., State Street , 49 F. 3d, at 1373. The appeals court may have thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents. In disapproving an exclusive machine-or-transformation test, this Court by no means desires to preclude the Federal Circuit’s development of other limiting criteria that further the Patent Act’s purposes and are not inconsistent with its text. P. 16.

Kennedy, J., delivered the opinion of the Court, except for Parts II–B–2 and II–C–2. Roberts, C. J., and Thomas and Alito, JJ.,joined the opinion in full, and Scalia, J., joined except for Parts II–B–2 and II–C–2. Stevens, J., filed an opinion concurring in the judgment, in which Ginsburg, Breyer, and Sotomayor, JJ., joined.Breyer, J., filed an opinion concurring in the judgment, in whichScalia, J., joined as to Part II.

The “useful, concrete and tangible result” test ofState Street should no longer be relied on. A method claim is surely patentable subject matter if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. BPAI affirmed.

The Supreme Court of the United States issued an opinion on appeal (as Bilski v. Kappos[2][3][4]) that affirmed the judgment of the CAFC, but revised many aspects of the CAFC’s decision. In their decision, handed down on June 28, 2010, the Supreme Court rejected the machine-or-transformation test as the sole test of process patent eligibility based on an interpretation of the language of § 101.[5] The majority, however, had high praise for the Federal Circuit opinions, advising that “[s]tudents of patent law would be well advised to study these scholarly opinions.”[6]

The serial number for the patent application is 08/833,892. The text is available on the USPTO web site.[7] The patent application describes a method for providing a fixed billenergy contract to consumers. Under fixed bill energy contracts, consumers pay monthly prices for their future energy consumption in advance of winter based on their past energy use. The monthly prices remain the same no matter how much energy they then use. Thus, consumers save money relative to others if, for example, a given winter is unusually cold and they use an unusually large amount of energy for heating. On the other hand, consumers pay more than others if a winter is unusually warm and their energy use is lower than average.

Method claim 1 of the patent application claims a three-step method for a broker to hedge risks for purchaser-users of an input of a product or service (termed a commodity). For example, an electric power plant might be a purchaser and user of coal, which it purchases from coal-mining companies (producer-sellers) and uses to make electricity. The power plant might seek to insulate itself from upward changes in the price of coal by engaging in “hedging” transactions. The risk can be quantified in terms of dollars (termed a “risk position”). Thus, if the purchaser-user uses 1000 tons of coal in a given period, and the potential price spike is $10 per ton, the purchaser-user’s total risk position for that period is 1000 × $10, or $10,000.

The claimed process comprises these steps (simplified for easier readability):

initiating a series of sales or options transactions between a broker and purchaser-users by which the purchaser-users buy the commodity at a first fixed rate based on historical price levels;

identifying producer-sellers of the commodity; and

initiating a series of sales or options transactions between the broker and producer-sellers, at a second fixed rate, such that the purchasers’ and sellers’ respective risk positions balance out.

The patent examiner rejected all 11 of the claims on the grounds that “the invention is not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts.” [8]

The applicants appealed the rejection to the Board of Patent Appeals and Interferences (BPAI), which affirmed the rejection, although on different grounds. The Board held that the examiner erred to the extent he relied on a “technological arts” test because the case law does not support such a test. Further, the Board held that the requirement of a specific apparatus was also erroneous because a claim that does not recite a specific apparatus may still be directed to patent-eligible subject matter “if there is a transformation of physical subject matter from one state to another.” The Board concluded that Applicants’ claims did not involve any patent-eligible transformation, holding that transformation of “non-physical financial risks and legal liabilities of the commodity provider, the consumer, and the market participants” is not patent-eligible subject matter. The Board also held that Applicants’ claims “preempt[] any and every possible way of performing the steps of the [claimed process], by human or by any kind of machine or by any combination thereof,” and thus concluded that they only claim an abstract idea ineligible for patent protection. Finally, the Board held that Applicants’ process as claimed did not produce a “useful, concrete and tangible result,” and for this reason as well was not drawn to patent-eligible subject matter.[8]

The applicants appealed the rejection to the Federal Circuit. The case was argued before a panel of the court on October 1, 2007. The court then ordered an en banc rehearing sua sponte, which was held on May 8, 2008. The Federal Circuit issued its decision on October 30, 2008.[9]

The en banc Federal Circuit upheld the rejection, 9–3. The majority opinion by Chief Judge Paul Redmond Michel characterized the issue as whether the claimed method is a patent-eligible “process,” as the patent statute (35 U.S.C. § 101) uses that term. While any series of actions or operations is a process in the dictionary sense of that term, the court explained, the Supreme Court has held that the statutory meaning is narrower than the dictionary meaning which “forecloses a purely literal reading.” Patent-eligible processes do not include “laws of nature, natural phenomena, [or] abstract ideas.” The limiting legal principle applies not just to processes, but to anything on which a patent is sought. As a trilogy of Supreme Court decisions on patent-eligibility from approximately three decades ago had taught, “Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” [10] Therefore, the question was whether Bilski’s process fell within any of the prohibited categories (that is, was a claim to a “principle”), and the underlying legal question was what legal tests or criteria should govern that determination when a claim is directed to a principle.

The court concluded that prior decisions of the Supreme Court were of limited usefulness as guides because they represented polar cases on the abstraction and concreteness spectrum. Nonetheless, a legal test could be distilled from them: “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” Not only did the patent-eligibility trilogy (Benson, Flook, and Diehr) support this test, the court explained, but so too did earlier Supreme Court precedents dating back well into the 19th century.

The court then considered whether this two-branch test should be considered all-inclusive, that is, as stating indispensable conditions of patent-eligibility. It concluded that the answer was affirmative, even though much of the language in the Supreme Court’s patent-eligibility trilogy was more reserved. The Federal Circuit placed great weight on the use of the definite article in several Supreme Court statements that transformation and use of a particular machine provided “the clue to the patentability of a process claim.” At the same time the court placed no weight on the fact that the Benson Court had not accepted the Government’s argument that the case law“cannot be rationalized otherwise.”[11]

The Federal Circuit observed that two caveats exist to the transformation-machine test: (1) a field-of-use limitation is insufficient to avoid the prohibition against pre-emption, as Flook expressly held; and (2) conventional or obvious “insignificant post-solution activity” does not make what is otherwise a claim to a principle patent-eligible (again referring to Flook). The court added that insignificant pre-solution activity (such as data-gathering) is equally ineffective, and so too is an insignificant step in the middle of a process (such as recording a result).

The court then rejected other proposed tests of patent-eligibility that had been suggested since the Supreme Court’s trilogy. Several Federal Circuit panel decisions had held that a process was patent-eligible if it produced “a useful, concrete, and tangible result” — such as the transformation of financial data from one form to another form. Thus, in the State Street Bank v. Signature Financial Groupcase [12] the court had upheld a patent on a tax-avoidance scheme under this standard. The court now recognized that this test is “inadequate,” as a dissenting Supreme Court opinion had already stated,[13] and therefore backed away from the language, denying that the Federal Circuit had ever “intended to supplant the Supreme Court’s test.” The court did not, however, expressly hold that State Street should be overruled: it merely dropped a footnote stating that “those portions of our opinions in State Street and AT&T relying solely on a ‘useful, concrete and tangible result’ analysis should no longer be relied on.”

The court next turned to the “technological arts” test (a patent-eligible advance must be “technological” in nature) and rejected it on several grounds: The meanings of “technological arts” and “technology” are disputed and ambiguous. No court has ever adopted the test. The technological-arts test is not an equivalent of or “shortcut,” the court insisted, that can be used instead of the transformation-machine test. “Rather, the machine-or-transformation test is the only applicable test and must be applied, in light of the guidance provided by the Supreme Court and this court, when evaluating the patent-eligibility of process claims.”

On the other hand, the court refused to adopt a test that barred business methods, under that rubric, from patent-eligibility. Also, while the court stated that the machine-or-transformation test was the applicable test, the Supreme Court in Benson had stated that there could be cases where a claim that fails the “requirements of [its] prior precedents” may still nonetheless be patent-eligible subject matter. Benson, 409 U.S. at 71. Similarly, software could not categorically be excluded. The court also stated that future developments may alter the standing or the application of the test.

Turning finally to Bilski’s method, the court held it patent-ineligible. First, the court said, Bilski did not argue that the rejected claims recited any specific or “particular” machine, so that the court found it unnecessary to decide any issues relating to the machine-implementation branch of the test. “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.”[14] Second, the court turned to transformation of articles from one thing or state to another. What is an “article”? Benson had made it clear that tanning hides, smelting ores, and vulcanizing rubber were all instances of transforming articles. This corresponded to the transformation test as the PTO and some amici curiae articulated it: one physical substance is transformed into a second physical substance. But what of electronic signals and electronically-manipulated data? Or even more abstract constructs such as legal obligations, which the Bilski case involved? No Supreme Court precedents addressed such entities.

Some Federal Circuit decisions, however, had held some transformations of signals and data patent-eligible. For example, the Abeledecision approved a dependent claim to a method transforming X-ray attenuation data produced in a X-Y field by an X-ray tomographic scanner to an image of body organs and bones — while at the same time the Abele court rejected a more generic and abstract independent claim to a process of graphically displaying variances from their average values of unspecified data obtained in an unspecified manner.[15] The court said that this kind of difference between the two claims was critical to patent-eligibility. The dependent claim, unlike the independent claim, involved signal data representing tangible physical objects, which were electronically manipulated to provide a screen image of the physical objects. But Bilski’s process had nothing to do with such a procedure. Like State Street, Bilski involved manipulation of financial data.

Bilski’s method claim was patent-ineligible because it did not “transform any article to a different state or thing.” Legal obligations (such as options and futures contracts) and business risks “cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.” Moreover, to the extent that signals are involved and are transformed, they are not “representative of any physical object or substance.” Accordingly, Bilski’s claim entirely failed the transformation-machine test.

Judge Dyk, joined by Judge Linn, concurred in the majority opinion upholding the PTO’s rejection of Bilski’s patent, but concurred also in Judge Mayer’s historical analysis that the framers of the Constitution intended to exclude from the operation of the US patent system “methods for organizing human activity that do not involve manufactures, machines, or compositions of matter.” Since Bilski’s method failed that test, it is patent-ineligible.

Judge Mayer dissented, first, on the ground that the majority opinion failed to overrule State Street explicitly. Whether this should be done was a question that the court had asked to be briefed on the re-argument. “I would answer that question with an emphatic ‘yes.'” He then moved to the major thrust of his dissent: business-method patents are unconstitutional, or the patent statute must be interpreted not to extend to them in order to avoid unconstitutionality. He maintained:

The patent system is intended to protect and promote advances in science and technology, not ideas about how to structure commercial transactions. Claim 1 of the application . . . is not eligible for patent protection because it is directed to a method of conducting business. Affording patent protection to business methods lacks constitutional and statutory support, serves to hinder rather than promote innovation and usurps that which rightfully belongs in the public domain.State Street and AT&T should be overruled.

Pointing to the Statute of Monopolies and the public hostility to the “odious monopolies,” he concluded that when Congress enacted the first patent statute (in language substantially unchanged to this day in regard to patent-eligibility), Congress did not want the system to allow patents on methods of conducting trade.[16]State Street was a grave error. “Before State Street led us down the wrong path, this court had rightly concluded that patents were designed to protect technological innovations, not ideas about the best way to run a business.”

Judge Mayer also criticized the majority opinion for doing nothing to remedy the ills of a “patent system [that] has run amok,” for evading crucial issues, and for failing to enlighten users of the patent system in regard to

three of the thorniest issues in the patentability thicket: (1) the continued viability of business method patents, (2) what constitutes sufficient physical transformation or machine-implementation to render a process patentable, and (3) the extent to which computer software and computer-implemented processes constitute statutory subject matter.

Judge Rader dissented on the ground that the majority should have “said in a single sentence: ‘Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.'” He then complained that instead of doing that, the majority opinion

propagates unanswerable questions: What form or amount of “transformation” suffices? When is a “representative” of a physical object sufficiently linked to that object to satisfy the transformation test? (E.g., Does only vital sign data taken directly from a patient qualify, or can population data derived in part from statistics and extrapolation be used?) What link to a machine is sufficient to invoke the “or machine” prong? Are the “specific” machines of Benson required, or can a general purpose computer qualify? What constitutes “extra-solution activity?” If a process may meet eligibility muster as a “machine,” why does the Act “require” a machine link for a “process” to show eligibility?

Judge Rader indicated his belief that nothing is wrong with patents on business methods or natural phenomena, so long as they are claimed to “achieve a useful, tangible, and concrete result.” In his view, the LabCorp dissent’s criticism of that test, and of business method patents generally, misses the point of the needs of 21st century innovation and entrepreneurship.

Judge Newman dissented on the ground that the PTO should have allowed Bilski’s patent. The opinion largely constitutes a debate with Judge Dyk’s concurrence about whether the Statute of Monopolies, common law precedents, and the widespread opposition to the “odious monopolies” led to a ban on business-method patents in the US. Judge Newman insists that “[i]t is inconceivable that on this background the Framers, and again the enactors of the first United States patent statutes in 1790 and 1793, intended sub silentio to impose the limitations on ‘process’ now created by this court.”

In short, Judge Newman felt that the current definition of the word process used by the court directly contradicted the statute, the precedent, and the constitutional mandate to promote the useful arts and science. Because the court’s decision could affect thousands of patents already granted, Newman warned of uncertainty in patent eligible matter which serves as a disincentive to innovation.

Prior to the Supreme Court’s decision on appeal, it was widely reported that the Bilski decision would call into question the validity of many already issued business method patents.[17] This issue has received global news coverage with a generally favorable assessment of the judgment.[18][19] According to The Associated Press, the decision “could reshape the way banks and high-tech firms protect their intellectual property.”[20] Moreover, as a result of the decision, according to The Washington Post and others, many business method patents, possibly thousands, may now be invalid.[17][21]

Recent decisions by the BPAI have used Bilski to overturn claims related to more traditional computer implemented inventions. Four out of five of the initial Bilski rejections, for example, were to IBM patent applications not in the business method area.[22]

In January 2009, Bilski and Warsaw petitioned the U.S. Supreme Court for a writ of certiorari, seeking to overturn the Federal Circuit decision.[23][24] It was granted on June 1, 2009.

In March 2009, a Federal Circuit panel split over what Bilski had held. For In re Ferguson the majority opinion (per Judge Gajarsa, joined by Judge Mayer) stated that Bilski has held that the “useful, concrete and tangible result test” “is insufficient to determine whether a claim is patent-eligible under § 101,” that it “is inadequate,” and that “those portions of our opinions in State Street andAT&T Corp. v. Excel Communications, Inc. relying on a ‘useful, concrete and tangible result’ analysis should not longer be relied on.”[25] In addition, the Ferguson majority said, “In Bilski, this court also rejected the so-called Freeman-Walter-Abele test, the “technological arts” test, and the “physical steps” test.”[26] In her dissenting opinion, Judge Newman took issue with the majority opinion as an erroneous “sweeping rejection of precedent.” She insisted that Bilski had left State Street partly in effect. She argued thatBilski had “recognized that the State Street Bank test was directed to processes performed by computer, “thus meeting the Bilskitest” and pointed to note 18 of the Bilski opinion, which stated, “In State Street, as is often forgotten, we addressed a claim drawn not to a process but to a machine.”[27]

A March 2009 district court opinion interpreting Bilski “ponder[ed] whether the end has arrived for business method patents.”[28] The court then observed:

Without expressly overruling State Street, the Bilski majority struck down its underpinnings. This caused one dissenter, Judge Newman, to write that State Street “is left hanging,” while another dissenter, Judge Mayer, registered “an emphatic ‘yes'” to rejecting State Street…. Although the majority declined to say so explicitly, Bilski’s holding suggests a perilous future for most business method patents.

The court concluded, “The closing bell may be ringing for business method patents, and their patentees may find they have becomebagholders.”[28]

^ In dissenting from the dismissal of certiorari in Laboratory Corp. of Am. Holdings v. Metabolite Labs., Inc., 548 U.S. 124, 136–37 (2006), Justice Breyer, with whom Justice Stevens and Justice Souter joined, pointed out how the State Street test makes things patent-eligible that Supreme Court decisions had held patent-ineligible.

^ However, one of Benson’s rejected claims had a computer part (shift register) as a recited element, and the Court dismissed this machine limitation as meaningless from a practical standpoint.

^ The significance of the observation about the machine claim format in State Street is uncertain, given the Federal Circuit’s repeated holdings that machine and process claims must be treated alike for purposes of statutory subject matter analysis under § 101. Compare note 18 withAT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 1357–58 (Fed. Cir. 1999) (“Whether stated implicitly or explicitly, we consider the scope of § 101 to be the same regardless of the form — machine or process — in which a particular claim is drafted. In fact, whether the invention is a process or a machine is irrelevant. …Furthermore, the Supreme Court’s decisions in Diehr,Benson, and Flook, all of which involved method (i.e., process) claims, have provided and supported the principles which we apply to both machine- and process-type claims.”; see alsoState Street, 149 F.3d at 1372 (“For the purposes of a § 101 analysis, it is of little relevance whether claim 1 is directed to a ‘machine’ or a ‘process,’…”).

The machine-or-transformation test is not the sole test for determining the patent eligibility of a process, but rather a useful tool. Bilski’s application, seeking a patent on a method for hedging risk in the commodities market, did not draw to patent eligible subject matter. Affirmed.

Bilski v. Kappos, 561 U.S. ___ (2010), was a case decided by the Supreme Court of the United States holding that the machine-or-transformation test is not the sole test for determining the patent eligibility of a process, but rather “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101.”[1] In so doing, the Supreme Court affirmed the rejection of an application for a patenton a method of hedging losses in one segment of the energy industry by making investments in other segments of that industry, on the basis that the abstract investment strategy set forth in the application was simply not patentable subject matter.

The Court affirmed the judgment of the Federal Circuit in In re Bilski, the case below. However, it rejected the machine-or-transformation test as a sole test of patentability based on an interpretation of the language of § 101.[2] The Court rejected the Federal Circuit’s statutory interpretation regarding the word “process,” finding the definition in § 100(b) to be sufficient without turning to the canon of noscitur a sociis.[3] § 100(b) defines process as a “process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.”

The Court also rejected a categorical exclusion of business method patents from eligibility, reasoning that the definition of “process” in § 100(b) includes the word “method,” which appears to comprehend some forms of business method patents.[6] 35 U.S.C. § 273(b)(1) also provides as a defense to patent infringement prior use of a “method of conducting or doing business.” By acknowledging the defense, the statute also acknowledged the possibility of business method patents.[7]

Regarding Bilski’s claimed subject matter, the Court found that his method of optimizing a fixed bill system for energy markets was an unpatentable abstract idea.[8] Despite taking a broader reading of patent eligibility for processes, according to the majority opinion “this Court by no means desires to preclude the Federal Circuit’s development of other limiting criteria that further the Patent Act’s purposes and are not inconsistent with its text.”[9]

In the plurality sections of Kennedy’s opinion, an overall Court minority opinion as not joined by Scalia, he notes that strict adherence to only “the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals” but “the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection.”[10] Kennedy also suggests that a categorical exclusion of some types of business methods from patent eligibility might be legitimate if that rule was based on the idea that purely abstract ideas are not patentable.[11]

Justice Stevens‘ concurrence, joined by Justices Breyer, Ginsburg, and Sotomayor, argues that the majority interpret the term “process” too broadly.[12] Stevens rejected the majority’s reliance on the mention of the word “method” in 35 U.S.C. § 273(b), saying that the statute, originally known as the First Inventors Defense Act of 1999, was only passed by Congress in response to the confusion created by State Street Bank v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998).[13] He would categorically exclude business methods from patentability, as they have not traditionally been patentable in the U.S., despite significant innovations in business methods.[14]

It was the final opinion in Stevens’ 35-year career on the Supreme Court. His retirement became effective the next day.

Justice Breyer‘s concurrence began by agreeing with Justice Stevens “that a ‘general method of engaging in business transactions’ is not a patentable ‘process’…” In a second part, joined by Justice Scalia, Breyer highlighted four points which he felt were consistent with both the opinion of the Court and Justice Stevens’ concurring opinion:[15]

that although the law’s description of what is patentable in §101 “is broad, it is not without limit.”

the Court has repeatedly stated that “transformation and reduction of an article to a different state or thing is the clue to the patentability of a process claim that does not include particular machines.”

“while the machine-or-transformation test has always been a ‘useful and important clue,’ it has never been the ‘sole test’ for determining patentability.”

“although the machine-or-transformation test is not the only test for patentability, this by no means indicates that anything which produces a ‘useful, concrete, and tangible result,’ [as held in State Street Bank v. Signature Financial Group] is patentable.”

Part II sums up by stating “it is my view that, in reemphasizing that the ‘machine-or-transformation’ test is not necessarily the sole test of patentability, the Court intends neither to de-emphasize the test’s usefulness nor to suggest that many patentable processes lie beyond its reach.”

The Court’s opinion in this case is seen as moderating the machine-or-transformation test requirement instated by the Federal Circuit inIn re Bilski, while also leaving little guidance as to what should be considered patentable under § 101.[16] “[T]he outcome from the decision might be best stated as ‘business as usual.’ “[17]

In light of the decision in Bilski v. Kappos, the Supreme Court granted judicial review, vacated the decisions of the Federal Circuit, andremanded to the Federal Circuit for reconsideration the cases of Mayo Collaborative Services v. Prometheus Laboratories, Inc. andClassen Immunotherapies, Inc. v. Biogen Idec.[18] The two claims related to medical diagnostics, and the claims in Prometheus were found patentable under the machine-or-transformation test while the claims in Classen were not.[19] In December 2010, the Federal Circuit applied the broad eligibility of Bilski in Research Corp. Technologies v. Microsoft Corp., which upheld the patent eligibility of a process for digital image halftoning.[20]

Patent Examiners and Practitioners were giving interim instructions on the interpretation of Biski v. Kappos both during the appeal process (on August 29, 2009) and shortly after the decision (on July 27, 2010) in documents issued by the USPTO.[21]

In response to the decision, the inventors, Bernard Bilski and Rand Warsaw made the following comments:[22]

Bernard Bilski – “We are personally disappointed that the Supreme Court ruled against our claims. However, we are very pleased that the Court maintained the patentability of business methods and other new areas of development.”

Rand Warsaw – “We are happy that the Court agreed with our arguments that the machine-or-transformation test is too narrow, but it would also have been nice to receive a patent after more than 10 years.”

The Untold Risks of the Supreme Court’s Same-Sex Marriage Decisions

September 19, 2013

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Less than two months ago, the Supreme Court’s same-sex marriage rulings triggered ecstatic celebrations among gay couples and advocates of equality. Although the Justices did not strike down laws limiting marriage to straight couples, that decision seemed an inevitable next step. But in reality, newly filed challenges to state marriage laws have set the table for what may be a catastrophic setback at the Supreme Court.

The Justices’ rulings do point towards an eventual ruling that same-sex couples have the equal right to marry. The Court is moving along with the tides of history.

The Court held that Congress could not refuse to recognize same-sex marriages endorsed by the states. And it also turned back an effort to reinstate California’s Proposition 8, which defined marriage as exclusively between a man and a woman. Those decisions build on two others dating back more than fifteen years, striking down laws that discriminate against gays and lesbians.

But those positive rulings make it easy to miss signals that the Court is not yet ready to announce a constitutional right to same-sex marriage before the states fully consider the issue. Presented with the perfect chance to issue a sweeping ruling in the California case, the Justices ducked and instead dismissed it on procedural grounds.

At oral argument, center-vote Justice Anthony Kennedy showed no enthusiasm for a broad ruling that would strike down the many state laws and constitutions that still embrace the traditional limits on marriage. Three more liberal Justices voted to avoid issuing any decision on the issue.

The separate ruling on the federal Defense of Marriage Act case was more encouraging. But the Court declined to hold that the Constitution requires the federal government to recognize all same-sex marriages. Instead, it ruled that if a state itself opts to recognize such a union, federal law must respect that choice.

Knowing that the lower courts would scrutinize the ruling, the Court carefully chose its language. The opinion reasons that laws recognizing same-sex marriage “eliminate inequality” and further the interests of the children of same-sex couples. But it seems to place principal responsibility to make that choice “within the realm and authority of the separate States,” rather than the federal courts – at least for now.

In dissent, Justice Scalia insisted that the Court’s ruling would inevitably lead it to announce a right to same-sex marriage. Chief Justice Roberts disagreed. In truth, both are probably right: the Court does not yet seem ready to take that significant step, but it could do so at some point in the next five to ten years.

In even that brief time, the number of states recognizing same-sex marriage will probably grow from thirteen to near twenty. The public’s acceptance of same-sex unions will continue to expand quickly. And a number of lower courts will begin to recognize a right to same-sex marriage.

It will become even more apparent to the Justices that these marriages are accepted and a valuable part of our diverse national fabric. Against that backdrop, the Court would be positioned to issue a decision that embraces a change in our social structure that is already well underway, rather than seeming to impose it.

But test cases now racing towards the Supreme Court will arrive there in months, not years. Following the NAACP’s model, gay-rights lawyers previously tried to bring individual cases that built over several years towards a sweeping ruling in favor of equality. The next incremental step now would be a ruling that a valid same-sex marriage must be recognized not only by the federal government, but also by other states.

But the moments at which justice seems within reach can present social movements with their greatest tests. The Court’s recent rulings have lit a fuse that may have a bomb at the other end. Individual couples who have misread the signals from the Supreme Court instead launched much broader constitutional challenges to the traditional definition of marriage.

Roughly ten cases are already pending. Soon, several will be decided by the courts of appeals.

Technically, the Justices could stay out of the fray; nothing requires them to hear such a case. But realistically, the question of whether the traditional definition of marriage is unconstitutional is so important that the Court must decide it.

At most, it might duck the first or second case. So we are no more than two or three years away from a ruling on the basic question of the definition of marriage.

If a majority of the Court is unwilling to anticipate the tides of history, it will issue a negative ruling that leaves the issue to the states and reject the claims of same-sex marriage advocates. That decision would almost surely be overturned after social attitudes have evolved further. But the Court does not reverse itself quickly. Its 1986 ruling upholding state sodomy laws was not overruled for almost twenty years.

Until then, progress towards changing state marriage laws could stall. More broadly, such a significant loss could undermine the clarity of the moral message sent by the Court’s rulings that discrimination against gays and lesbians is irrational and wrong. The Justices’ response to that looming dilemma will be an extraordinary test of their judgment.

Apple: The Beginning of a Long Decline?

Maybe it’s because we expect so much from Apple. This is the company that brought us the first MP3 player that really mattered, the first smartphone to truly take the world by storm, the first successful touch-screen tablet, and the first ultralight notebook that people were really happy to use. And that’s all just in the past few years — reaching back further than that, Apple is responsible for the first all-in-one PC, the first commercially successful graphical user interface, and many more product design, manufacturing, and retail innovations.

This is what was so amazing about the late Steve Jobs: He drove the company to revolutionize industry after industry. Most successful entrepreneurs only get to change one industry, if they’re lucky; Jobs reinvented half a dozen.

It’s unfair to keep holding Apple to the same high expectations. After awhile, you run out of industries to reinvent. What’s next: Cars? The construction industry? Plumbing?

Not only that, even the best sluggers don’t hit home runs every single time they step up to bat.

Now, don’t get me wrong. This week’s upgrades look like excellent phones. The iPhone 5C has the same elongated, high-resolution screen of the iPhone 5, but comes in a variety of primary colors and costs somewhat less than the original, at just $100 on contract or $549 off-contract. That should help Apple reach a bit further into the market for lower-cost smartphones.

The company also said it was about to start rolling out iOS 7, the details of which it had fully explained a few months back, and which has been in developers’ hands since June. I’m underwhelmed by iOS 7 but it does offer a host of new features for developers and consumers — as well as some special “floating” effects that will help soak up some of that extra processing power. And iOS remains the most polished, coherent, well-designed operating system available for a smartphone.

In all, it’s a solid upgrade to the iPhone line that should keep many current customers happy when it’s time to renew their contracts, and might even attract a few new ones to Apple’s fold.

But the bigger issue is that Apple is facing an existential threat, and this week’s news suggests it has no clue about how to respond appropriately. Android now accounts for more than 80 percent of smartphone sales, while iOS is down in the mid-teens. This is a company that is slowly but surely losing the final stages of its war for the phone industry. Merely keeping the faithful happy is not working. Incremental upgrades are not going to stem the tide.

Consider the pricing of the iPhone 5C. It’s cheaper, yes. But as my colleague John Koetsier has pointed out, its unsubsidized price is still hundreds of dollars more expensivethan competing Android phones. That makes a huge difference in countries where a few hundred dollars amount to a month’s worth of wages.

And consider the addition of the fingerprint sensor. I joked that Apple left out a key part of its technology diagram by not including the secret NSA back door. That’s a timely jab, given the recent news that the NSA has targeted iPhones for hacking and has successfully captured images from intelligence targets via the device. It’s also a bit unfair, since Apple assures us that the fingerprint data is encrypted and will never make it out of the phone, let alone into the cloud — so until the iPhone 5S suffers a particularly hostile hack, that data is probably safe.

But the real question is: Why? What is so great about a fingerprint sensor? It’s a nice, convenient way to unlock your phone — assuming it works more reliably than prior sensors — but it’s hardly redefining the rules of the smartphone game.

Finally, there’s the question of the iWatch. Many of us expected Apple to launch a wrist-mounted wearable device this week, but there wasn’t a peep about this in Cupertino on Tuesday.

Smartwatches are, for now, kind of a silly category. Fewer than a million of the things are sold each year, mostly to geeky tech enthusiasts. The biggest consumer entry into the smartwatch space was Samsung’s launch, last week, of its Galaxy Gear watch — a news event that got an extra bit of news hype when VentureBeat got an early look at the thing (you’re welcome, Samsung). But the Galaxy Gear is bulky, awkward, only works with Samsung phones (for now), and will probably cost about $300.

One of the reasons we were all hoping for an iWatch is that this is exactly the kind of product category Apple excels at doing. As it did with tablets, we all wanted Apple to come in and show us how to build a product that people will really want. No doubt Apple would come up with something more elegant, more svelte, and more desirable than anything that’s come before, and suddenly no one would mind spending $200 or $300 on a smart watch any more.

But Apple didn’t do that. There was no sign of a watch. So those of us in Silicon Valley are left watching, wondering, and feeling a little empty inside. Maybe it will show us something amazing later this fall, as CEO Tim Cook has promised. Maybe not. In the meantime, we’re left with these multicolored iPhones, and a growing sense that Apple is turning into a more ordinary tech company every day.

Jobs is gone. It looks like Apple’s magic is slowly seeping away now too.

The Voice of Peace (Hebrew: קול השלום – Kol Hashalom) was a radio station that served Israel and the Middle East for 20 years. The station first went on the air in May 1973 from the ship MV Peace (formerly the Dutch cargo vessel MV Cito).

The 1980s brought a revolution to the communication market in Israel:

In 1984, Bezeq was established to reduce bureaucracy and improve efficiency, significantly reducing the waiting period for the installation of new telephone lines.[citation needed]

The Second Israeli Broadcasting Authority was established and the first Israeli commercial channel – Channel 2 began to broadcast on the November 4, 1993. This began the era of television ratings in Israel. The original agreement was that the broadcasting days of the channel were distributed among three broadcasting companies in order not to have a direct competition between them.[citation needed]

The multichannel television platform in Israel began when the cables TV companies were established. Every company had a monopoly in a certain area of the country (according to a franchise given by the Ministry of Communications). For the first time, the Israeli public became exposed to tens of foreign channels from other countries around the world (which overtook the place of the Jordanian andLebanese channels which were the only foreign channels received in Israel until then), and to new local channels on the cables: The children channel, The sports channel, The family channel, and the films channel. The move brought to almost total elimination of the pirated cables broadcasting in the country.[citation needed]

The Israeli Pirate radios experienced prosperity which happened in tandem with the establishment of legal regional radio stations, and to the reorganization of the military radio stations in 1993 (the establishment of Galgalatz in tandem with the Israel Defense Forces Radio, instead of the former two stations “Army 1” and “Army 2”). In spite of all the changes in the field of radio broadcasting, this medium lost the majority of the listeners ratings during the nineties, and by the end of the decade, the radio was considered to be a communication medium which had few listeners in relatively to the television.[citation needed]

In 1994, Cellcom joined the cellular communication market in Israel. At the start, the company experienced different problems with the devices they provided, when their users experienced many disconnections and intermittence during conversations.[1]

In 1998, Bezeq ceased from being a monopoly in the market of international telephony conversations after the market of international conversations telephony opened to competition, and two additional companies entered the field – Golden Lines, and Barak. The activity of Bezeq in this field passed to its subsidiary Bezeq International.[citation needed]

In 1999, Partner Communications Company joined the cellular communication market in Israel with the brand-name Orange. Partner was the first company which built network foundations in Israel which worked under GSM technologies.[citation needed]

In 2000, the Israeli satellite television provider Yes was established. At the time it was established, there were still three active cable companies in Israel: Tevel, Matav and Arutzay Zahav. The competition with Yes caused a big loss of members amongst the cable TV companies which urged them to merge. In order to strengthen Yes, which was relatively new, the regulator postponed his approval to the merger of the cable companies. In 2003, the cable companies began to act under the brand-name of the Hot. At the start of 2007, the companies completed the merging. In this decade Hot and Yes inserted the use of the digital set-top boxes, and with them it became possible to receive digital broadcasts (improvement in the quality of reception of the television channels), and additionally also enables games channels, video on demand (V.O.D) and nowadays they even supply digital set-top boxes which contain advanced DVRtechnologies which are capable of pre-recording show (Hot Magic, Yes Max). HOT has put a big emphasis on encouraging production of local Israeli movies, while YES, in contrast, puts more emphasis on purchasing foreign TV series and movies. The struggle between the two companies is still its intense.[citation needed]

Under the inspection of the Second Israeli Broadcasting Authority, an additional Israeli terrestrial-commercial channel was established on 28 January 2002 – Channel 10. This move started a competition among the commercial channels. Channel 10 purchased for itself hosts and actors from Channel 2 and Channel 1. In spite of these procurement actions, the channel is still considered to be inferior in the amount of its viewers relatively to the other channels.[citation needed]

In 2005, an additional bid took place in channel 2, in which “Keshet” and “Reshet” were chosen to be the channel’s broadcasts to the consequent decade.[citation needed]

On March 30, 2010 all analogue terrestrial television towers were switched off and digital distribution ( “Idan Plus”) is the only Digital Terrestrial System in effect. The first phase includes 5 SD channels ( IBA-1, IBA-33, Channel 2, Israel 10 and The Knesset Channel) . The system is DVB-T / MPEG-4 and in SFN configuration with 2 frequencies across the whole country ( north and south are UHF 26 while central is UHF 29) . A second phase with more channels is expected in 2012 ( also IBA-1 HD) and a third phase maybe in 2013.

Broadband Internet became prevalent in the majority of homes in Israel. Bezeq stopped being a monopoly in the field of the landlinecommunications, when Hot started offering telephony services through the cables infrastructures.[citation needed]

In middle of the decade due to the popularity which the hi-speed internet and VoIP Technolegies gained amongst the Israelis, at first Israelis were able to conduct international conversations free of charge or at lower rates through the Internet due to the link between VoIP networks such as Skype and Vonage to the traditional telephony networks in Israel and abroad.[citation needed]

In 2004, three additional companies entered the market of international calls – Internet Gold with the prefix of 015, NetVision with the prefix of 017, and XFone with the prefix of 018, and the competition in this field became stronger. Recently this field extensively consolidated.[citation needed]

In middle of the decade, all the portable phone numbers in Israel were changed from six to seven digits including a new area code, due to the massive amount of unique cellular phone numbers.[citation needed]

The Israeli radio succeeded to recover from rating problems and opened more regional radio stations.[citation needed]

On December 17, 2007 the Israeli parliament approved a new law which enables the Israeli police and other law enforcement bodies to access communication data without judicial inspection.[citation needed]

On June 4, 2008, the Ministry of Communications published a concession for operating a system which would enable broadcasting of digital radio transmissions in Israel. Over 50 stations nationwide are estimated to be broadcasting their transmissions on the Israeli digital radio broadcasts.

The mail field in Israel treads towards competition. The Mail Authority became the Israeli Postal Mail Service (still in governmental ownership). Gradually, they enabled additional companies to enter the market of postal deliveries of mail with a weight up to half a kilogram; this was done so that they could compete with the governmental mail company allowing the postage rates to drop.

There are currently six companies in Israel which are in charge of the landline telephony field: Bezeq, Hot, 012 Smile, Globcall, Cellcomand Orange. Bezeq is the oldest of all of them and is reputed to have a monopoly in the field. Hot uses its cables infrastructure in order to provide telephony services. The cables infrastructure is currently not yet spread throughout the entire country and therefore not every house in Israel can be a member of Hot; in comparison, Bezeq has landline infrastructure in all towns and villages in the country. The strategy of 012, Globcall, Cellcom and Orange is different from the former two in that they did not rush to establish a new physical infrastructure; rather, they provide telephone services which are based on the infrastructure of Bezeq and Hot, by means of Internet telephony technologies and additional technologies.

There are currently six companies in Israel providing international telephony: Bezeq International (prefix 014), 012 Smile, 013 NetVision,Hallo[disambiguation needed] (prefix 015), XFone (prefix 018) and Telzar (prefix 019). All the companies offer memberships services which usually offer their customers cheaper rates. Membership might include some benefits such as billing, and dialing the default 00 prefix instead of the need to dial the specific prefix of the company (as it was done in the past, when Bezeq had a monopoly in this field). Because these companies have an extensive infrastructure of links abroad, the majority of them also provide internet services. Incoming calls are distributed through the companies relative to market share.

There are currently two companies in the market of multichannel television. Hot (which provides television services through an underground infrastructure of cables) and Yes (which provides television services through satellite transmissions). The cables company has an advantage over the satellite company due to a permit granted to it from the communication office, which enables it to provide full bidirectional communications (for example the ability to provide Video on demand services).

There are currently only two commercial channels on the Israeli television – Channel 2 and Channel 10. There also exist several niche channels which make their earnings from TV advertisements, such as: Israel Plus, Music 24, and the Israeli shopping channel. Additionally, Channel 1, which belongs to the Israel Broadcasting Authority, can finance itself partially with the help of a few announcements, although most of its budget comes from the payment fees every house in Israel which has a television set pays annually. Channel 10, in contrast with Channel 1 and Channel 2, circulates its broadcasts to the public only by means of cables infrastructure and satellite infrastructure, without broadcasting on regular air waves; thus, they have a smaller amount of potential viewers.

The Internet companies market are divided into two categories: infrastructure providers and service providers. The infrastructure providers are Bezeq and Hot. The largest Internet service providers are Bezeq international, NetVision 013 Barak, 012 smile, in addition to 35 smaller companies.

The highest speed available nowadays to the domestic Israeli internet user is 100MBit in download and 2MBit in Upload—which is provided by Hot.[2][3]

The future of broadband Wireless Internet will be decided towards two possible directions – one possibility would be the takeover of the Cellular companies’ third generation and fourth generation systems and the second possibility would be the other communication companies with their WiMax technologies.

In the mid-first decade of the 21st century, mobile telephone numbers were changed from six to seven digits and prefixes/area codes were consolidated to reflect the need for the increasing quantity of subscribers.